One was a terrifically strong capital markets business, which peaked in 2000 during the zenith of the stock market bubble. At the same time the company delivered short-term results through a series of cost-cutting mergers which kicked off a decade and a half ago by the merger of Chemical Bank and Manufacturers Hanover.

In realizing the benefits of the JPMorgan acquisition of Bank One, Dimon could easily pursue the company’s old cost cutting formula. Such a strategy is easier for analysts to get their arms around such a strategy (and therefore applaud it). Moreover, it fits Dimon’s image as the no-nonsense hard-nosed manager; BusinessWeek calls him the “Hatchet Man.”

Dimon is pursuing a different tack, because he’s smart, first of all, and as a 49 year old CEO successor in waiting, he knows he has a lot of time ahead of time.

Dimon recognizes the need to delay realization of the cost cutting benefits of the Bank One acquisition by making substantial investments across the company. The long neglected retail bank is in the early stages of receiving a substantial overhaul and expansion, and eight global private banking offices will be opened. Investments will be made in technology which helps expand the credit card and consumer finance business. The investment bank is getting a new commodities and currency trading platform. The 401-K administration business will be significantly expanded.

JPMorgan’s near term earnings are weighted down from such expenditures, giving many analysts heartburn. The company’s trade about 20% below the high JPMorgan shares touched in the afterglow of the Bank One merger announcement. One analyst is quoted in the story to the effect that a one to two year turnaround story is now a three to five year story.

Dimon’s moves are not just appropriate; they are in fact essential for this company to have any hope of sustained vitality over the long term. While optically pleasing to earnings in the short run, the old formula this company employed for years has played out. The law of large numbers combined with the effects of underinvestment in the business have insured as much.

Dimon is a very unusual large bank CEO. He doesn’t deal in grand visions induced by the latest “synergistic” deals. Based on the anecdotes I’ve heard about his time as Bank One’s CEO, he spends a lot more time with in the trenches with actual customers, God forbid. He understands, as he is quoted in the article, that banking is "1,000 small steps."

I wasn’t swept up in the giddiness of the Bank One acquisition when it was originally announced. The spin on the deal’s “benefits,” spouted by CEO William Harrison and even Dimon himself, sounded too pat, too assured.

The reality, though, is that Dimon is forcing JPMorgan into tackling a much more difficult yet lucrative task: reinvigorating the company, business line by business line, so that sustainable organic revenue growth can be achieved. Such a strategy makes JPMorgan shares, particularly now that it has drawn more skeptics, much more inviting.